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Analysts predict increased inflation and reduced growth for Mexico in 2025

Analysts forecast higher inflation, slower growth for Mexico in 2025

Analysts Predict Higher Inflation and Slower Growth for Mexico in 2025

Private sector analysts in Mexico are painting a challenging economic outlook for the year 2025, with lower GDP growth and higher inflation on the horizon. According to the latest monthly survey by the central bank (Banxico), experts are forecasting a GDP growth of 1.78% for next year, slightly lower than the 1.80% previously predicted. Inflation is also expected to rise to 3.76%, up from last month’s 3.71% outlook.

While inflation expectations for this year have been slightly trimmed to 4.23% from 4.27%, analysts are less optimistic about economic growth, predicting a 2.00% expansion instead of the previously expected 2.10%. The main factors cited as potential hindrances to Mexico’s economic growth in the coming months include governance and internal economic conditions, according to the specialists consulted.

Economist Gabriela Siller, director of economic analysis at Grupo Financiero Base, expressed concerns about the challenging economic environment expected in 2025, with higher inflation and lower economic growth. The Banxico survey also revealed that analysts anticipate an exchange rate of 18.73 pesos per dollar this year and an interest rate of 10.25% by the end of 2024.

Despite market uncertainty and persistent inflation pressures, the central bank’s governing board decided to keep the interest rate at 11% last week. Looking ahead to next year, economic specialists are predicting an exchange rate of 19.36 pesos per dollar and a reference interest rate of 8.25%.

Siller highlighted the Mexican peso’s significant depreciation against the dollar at the start of the second half of the year, attributing it to risks such as the high fiscal deficit, economic slowdown, and potential constitutional reforms by the new government. In June alone, the Mexican peso depreciated by 7.59% against the dollar, mainly due to market volatility following the June 2 election results.


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